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Two German Crypto Tax Models Diverge by €21,100
Germany's one-year crypto holding period faces two competing reforms. On a €100,000 gain, the gap between them is €21,100. No law exists yet.
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Two models for taxing crypto in Germany are circulating. On a €100,000 gain held past twelve months, they are €21,100 apart. As of 12 August 2026, no law and not even a ministry draft on crypto taxation exists.
Under section 23 of the German Income Tax Act, crypto assets count as "other economic goods." A private sale is taxable only when fewer than twelve months passed between purchase and disposal. Sell earlier and the gain is added to ordinary income at rates up to 45% plus the solidarity surcharge. Sell later and the gain is not taxed at all. The Federal Fiscal Court confirmed in February 2023 (case IX R 3/22) that crypto falls under this rule, the same one that applies to physical gold or a classic car.
The finance ministry's line is that crypto would be lifted out of private disposals and treated like interest, dividends and stock gains, at a flat withholding rate of 25% plus the 5.5% solidarity surcharge on that tax. That yields 26.375%. Church tax pushes it near 28%, depending on the federal state. No legal text exists for this model. Everything rests on a budget document and the finance minister's public statements. The open questions include whether the €1,000 saver's allowance would apply, how losses could be offset, and whether crypto exchanges would become paying agents that withhold tax at source.
The alternative model exists as finished statutory language. The bill from the Green parliamentary group carries the number 21/5752, dated 5 May 2026. Article 1 number 1 inserts a new sentence into section 23: "The one-year deadline in sentence 1 does not apply to disposals of crypto assets." Crypto would remain an "other economic good." The explanatory memorandum states the consequence plainly: gains would be taxed "regardless of the holding period, on disposal, at the personal income tax rate." Depending on other income, that is up to 45% plus the solidarity surcharge.
The bill was rejected in the finance committee on 20 May 2026. Only Die Linke supported it. The Social Democrats voted against it because they wanted to wait for their own finance minister's proposal. The text is dead as a vehicle yet alive as a blueprint: it is the only fully drafted statutory language anyone has produced on this question.
The arithmetic on a €100,000 gain after more than twelve months, with no church tax and no other private disposals, looks like this. Under the ministry's model, €26,375. Under the bill at the 42% marginal rate, €44,310. At the 45% top rate, €47,475. The gap at the top rate is €21,100.
The solidarity surcharge behaves differently in the two models. On the flat withholding tax it is levied without any threshold. On assessed income tax it only kicks in above a threshold that most taxpayers no longer cross. At the 42% and 45% marginal rates the threshold is exceeded, so the surcharge applies. On smaller gains and lower other income the arithmetic changes. That is why the blanket claim "crypto is about to get more expensive" is worth so little.
The rate difference is clear. Stock gains face 25% plus surcharge. The bill applies personal rates up to 45% plus surcharge. That is not parity; it is a penalty of up to 21.1 percentage points.
Loss offsetting differs. Losses from private disposals under section 23 may only be netted against gains from other private disposals. They sit in their own narrow bucket and cannot be set against interest or dividends. Under the section 20 model, crypto losses would join the much wider capital-income bucket.
Withholding also differs. Section 23 has no withholding mechanism by design. Every single disposal has to be declared, with acquisition date, cost basis and proceeds. The section 20 model could in principle withhold at source, only through a domestic paying agent. How that would work for exchanges based elsewhere in the EU appears in neither document.
The most revealing passage of the bill is in the reasoning, not the statutory text. The drafters explain why singling out crypto is justified: "The provision is appropriate because other economic goods such as physical gold, antiques, artworks, historic vehicles or foreign currencies are used for speculative gains to a considerably lesser extent." The bill does not clean up the system. It removes one asset class and justifies that with an assumption about how investors behave. That is where the constitutional exposure sits. Germany's Article 3 equality clause requires an objective reason for unequal treatment. Whether a behavioural assumption qualifies would be for the courts to decide. The same section states that crypto assets have "not proven themselves as a digital equivalent to gold and other precious metals."
The reasoning also contains a claim that does not survive checking. It says Germany is "almost the only country within the European Union" that exempts gains after a short holding period. Portugal exempts after 365 days and taxes shorter holdings at 28%. Czechia has exempted disposals after three years since the 2025 tax year. Luxembourg applies a six-month speculative period. Holding-period exemptions are not the German anomaly the bill describes.